Grant Program On Hold Amid Shutdown

January 18, 2019By Frank McCormack

The Small Shipyard Grant Program, an annual Maritime Administration grant aimed at bolstering and modernizing smaller shipyards, is in limbo for now due to the partial government shutdown, which is the longest in the nation’s history.

The shutdown is having a twofold impact on the program, impacting new applications and previous grant recipients alike.

First, without an appropriations bill in place, the amount for the 2019 Small Shipyard Grant Program is not set in stone and new applications cannot be submitted.

David Matsuda, principal of Matsuda & Associates LLC and a former Maritime Administrator in the Obama administration, said while the timing for 2019 is unknown, the outlook is nonetheless promising for the next round of the Small Shipyard Grant Program.

“Both House and Senate appropriations committees last Congress included $20 million in their proposals, which is a very good sign,” said Matsuda, who promotes the grant program and serves as a consultant for shipyards. “This is the first year in the history of the program in which both committees have proposed funding for the program and at the same level.”

Matsuda encouraged shipyards interested in applying for the anticipated 2019 grants to stay engaged and be ready to act quickly once the government is funded.

“If a deal is made to end the shutdown and fund the government for the rest of the year, things will happen quickly,” Matsuda said. “According to federal law, when the Maritime Administration receives funds for the grant program from Congress, it has 15 days to publish a grant notice, and grant applications are due in 60 days. So if you wait until after the grant notice is published to get started on your project, you’ll only have a little over six weeks to prepare an application.”

Matsuda urged small shipyards interested in applying in 2019 to start planning now.

“History has shown the grant notice tends to change very little from year to year,” he said. “So the FY2018 grant notice should serve as a good guide.”

And that planning process takes time. Matsuda said permitting or multi-organization collaborations must be ironed out, shipyards have to budget for the 25 percent match requirement, and complex projects must be cost-estimated to determine feasibility. Additionally, the Buy American Act may require shipyards to identify an American supplier. And depending on when the grant notice comes out, grant writers or consultants could be hard to come by.

Secondly, with much of the Maritime Administration furloughed during the shutdown, reimbursement requests for grants from prior years may not be processed until a budget deal is passed. Masuda said that might not only delay existing shipyard grant projects but also cause financial strain for small shipyards who depend on lines of credit to finance operations and order long-lead-time parts.

“What usually takes a week or so will take till the end of the shutdown, until you can be reimbursed,” Matsuda said.

Since the Small Shipyard Grant Program was established in 2006, funding each year has averaged between $10 million and $20 million, with a peak allocation of $100 million in 2009 as part of the American Recovery and Reinvestment Act. The grant funds up to 75 percent of the total cost of equipment purchases or facility improvements at smaller shipyards, defined as those with fewer than 1,200 employees and primarily involved in the construction and repair of commercial vessels.